Wednesday, February 27, 2013

Margaret Thatcher made famous the saying, There Is No Alternative (TINA) when selling her economic snake-oil to a skeptical public. So it's fun to read a good Brit explain that there ARE alternatives and they are succeeding quite splendidly in Latin America. It also contains a shout-out to our man in Ecuador, Rafael Correa, Ph.D. in economics, University of Illinois at Champaign-Urbana—someone who figured out progressive economics somewhere. The fact that it might have been in the state that gave us the madness of the Chicago Boys is just frosting on a great story.

Think There's No Alternative? Latin America Has A Few

Ever since the crash of 2008 exposed the rotten core of a failed economic model, we've been told there are no viable alternatives. As Europe sinks deeper into austerity, governing parties of whatever stripe are routinely rejected by disillusioned voters – only to be replaced by others delivering more welfare cuts, privatisation and inequality.

So what should we make of a part of the world where governments have resolutely turned their back on that model, slashed poverty and inequality, taken back industries and resources from corporate control, massively expanded public services and democratic participation – and keep getting re-elected in fiercely contested elections?

Despite their differences, it's not hard to see why. Latin America was the first to experience the disastrous impact of neoliberal dogma and the first to revolt against it. Correa was originally elected in the wake of an economic collapse so devastating that one in 10 left the country. Since then his "citizen's revolution" has cut poverty by nearly a third and extreme poverty by 45%. Unemployment has been slashed, while social security, free health and education have been rapidly expanded – including free higher education, now a constitutional right – while outsourcing has been outlawed.

And that has been achieved not only by using Ecuador's limited oil wealth to benefit the majority, but by making corporations and the well-off pay their taxes (receipts have almost tripled in six years), raising public investment to 15% of national income, extending public ownership, tough renegotiation of oil contracts and re-regulating the banking system to support development.

Many of the things, in fact, that conventional "free market" orthodoxy insists will lead to ruin, but have instead delivered rapid growth and social progress.more